Radio 702 held a discussion involving  Core Group Executive Director, RJ van Spaandonk and Cool Apple Buddies Store (Sandton) owner, Sharon [Schwarma] (not sure of the spelling of her surname).

The chat “sort of” covered the following subjects:

1. CAB Store being a grey importer
2. Core Group being a distributor and a reseller in the same market
3. Core Group’s ludicrous pricing structures

Overall, the discussion was just two people running around in complete circles doing the blame game.  RJ made accusations that Apple have taken legal action against CAB for misuse of the Apple brand, Sharon denies that legal proceedings have been initiated.

Legally, there is nothing wrong with selling nor purchasing grey imports.  According to CAB, all their Apple products are honoured under Apple’s International Warranty.

CAB claim that Core Group obtain their Apple products from a reseller in Europe and that CAB get theirs from a reseller in US, implying that they get their products from similar channels.  RJ denied that they purchase from a reseller, saying that Core Group purchase from Apple Europe directly.  Surely Apple have the same agreement with a local reseller/distributor in Europe (http://www.apple.com/uk/buy/distributors/) that Apple have with Core Group here in SA?  Do Apple Inc. have offices in the Europe?

When asked by a caller what the reason was for their high prices, comparing prices on a Mac Book Air which retails for  $1499 in the US and R18,999.00 in SA,  RJ said that the prices quoted in SA are inclusive of VAT so that needs to be subtracted.  So that makes the SA price R16,665.79.  RJ also said that due to fluctuations in the exchange rate, they have leveled their rate of exchange at R10 to compensate (Currently R7.58).  So that makes the US price here in SA about R14,990.00.

So, in essence, there is only a R1,675.79 difference in price.  But the reality is, even though Core Group have fixed the exchange rate, they are still purchasing products at the current exchange rate (R7.85) and if the exchange rate is fixed, it’s usually only fixed on a weekly average. Core are more than likely receiving a reseller discount of some sort on that as well.  I don’t want to venture a guess, but according to statements from CAB on Radio 702, an Apple Premium Reseller will obtain 15%-20% discount on products.  As a distributor in South Africa, one would assume that Core Group receives a greater discount percentage, thereby decreasing the price even more so.  So, that pricing structure from RJ doesn’t hold water with me.

RJ was asked why they are retailing and distributing in the same market to which RJ simply did not offer an suitable answer, only to refer back to Core’s “pricing structure”.

So, all in all, I feel that the 40min debate proved absolutely nothing, other than confirming that it is not illegal to purchase, or sell grey imported products in South Africa.

UPDATE: Here is the Podcast of the discussion on Radio 702 - Radio 702 – Grey Import Discussion – Core vs. CAB